1) Deferred revenue occurs when cash is received from a customer before work or the sale is completed. True False

2) In accrual accounting, revenue may be earned prior to or after cash is received. True False 3)An expense incurred in 2016 is not paid until 2017. Using the accrual basis of accounting, the expense should appear on:

A.both the 2016 and 2017 income statements

B.the 2016 income statement

C.neither the 2016 nor 2017 income statement

D.the 2017 income statement

4) On December 1, 2017, Cream Ale Ltd. receives $1,800 in advance for an agreement to brew beer during the months of December, January, and February. As of December 31, 2017, Cream Ale Ltd:

A)would have recognized $600 cash under accrual accounting, and would have recognized 1,800 cash under cash basis accounting

B.would have a $0 liability to its client under accrual accounting, and would have a $1,200 liability to its client under cashbasis accounting

C.would have recognized $600 revenue under accrual accounting, and would have recognized $1,800 revenue under cashbasis accounting

D. would have a $1,200 liability to its client under accrual accounting, and would have a $1,800 liability to its client under cashbasis accounting 5)A deferral refers to an event:

A.where the recognition of an expense or revenue is recorded after the cash is paid or received

B.where the recognition of an expense or revenue is recorded before the cash is paid or received

C.where the liability for an expense is recorded after the expense is actually incurred

D.where the liability for an expense is recorded before the expense is actually incurred 6) Retained earnings for the beginning of a period appears on the statement of retained earnings while the ending balance of retained earnings appears on the statement of retained earnings and the balance sheet. True False